If you are looking for a safe place to invest your money, the Public Provident Fund (PPF) is considered a reliable option.
It is a government-backed savings scheme that allows people to make long-term deposits and earn fixed interest on their investment.
One of the biggest advantages of PPF is its tax benefit. The money you deposit, the interest you earn, and the final amount you receive at maturity are all completely tax-free.
Currently, the government offers 7.1% annual interest on PPF accounts.
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Lock-in Period and Withdrawal Rules
A PPF account comes with a 15-year lock-in period, which means the money stays invested for a long time. However, withdrawals are allowed in certain situations.
Even though the account has a long tenure, there are some ways through which you can withdraw money before or after maturity.
Ways to Withdraw Money from PPF
There are three main ways to withdraw money from your PPF account.
1. Partial Withdrawal
If your PPF account has completed five years, you can withdraw up to 50% of the deposited amount. This withdrawal can be done without paying any penalty.
2. Premature Closure
In special situations such as medical emergencies or urgent financial needs, the account can be closed after five years. In this case, you can withdraw the entire amount. However, the interest earned will be reduced by 1%.
3. Withdrawal After Maturity
A PPF account matures after 15 years. Once it reaches maturity, you can withdraw the entire balance without paying any penalty.
If you decide to extend the account for another five years after maturity, you can withdraw up to 60% of the total deposited amount during this extended period. However, withdrawals can be made only once per year.
Withdrawal Process Before the Lock-in Period
If you want to withdraw money before the lock-in period ends, you need to follow a specific process.
First, download Form C. This form is available at your bank branch or on the bank’s website. Fill in the required details, including the amount you want to withdraw and the age of your PPF account.
After filling out the form, attach a copy of your PPF passbook. Then submit the completed form and documents to your bank branch.
Once the bank approves your request, the withdrawal amount will be transferred to your registered bank account.